National Lab Director On Tesla Battery: 'This Is The Future, Now'

At the foot of Table Mountain in Denver, the federal government's Energy Systems Integration Facility runs a megawatt-scale model of the nation's electrical grid, so scientists and engineers can plug in new technologies to see how they'll affect the system.

That work has become increasingly urgent, the lab's associate director said Monday, as emerging technologies have leapt to market viability.

At an appearance in Washington D.C., Bryan Hannegan displayed four charts that plot the falling costs of emerging technologies—land-based wind, solar photovoltaic modules, LED lighting, and electric vehicles and batteries—against their rising market penetrations.

"Some of that was as a result of investments, very targeted on the part of the government," Hannegan said, "but even now if you look at the recent announcements by Tesla around battery storage, and some of the other startups in that space, you're seeing similar cost declines and deployment increases. So this is the future, now. We don't have to wait for it for much longer."

In the fourth of those charts, DOE analysts had pegged the capital cost of lithium-ion battery storage at about $500/kWh of battery capacity, which is where the price had been hovering until last month, when Tesla CEO Elon Musk announced a grid-level battery, the Tesla Powerpack, at $250/kWh.

Tesla packed appealing features into its new line of home and commercial batteries—a 10-year warranty, a 15-year lifespan, plug-and-play capability, design as sleek as an Apple product—but it was the new low cost of the grid-level Powerpack that rattled the electric industry.

A new electric system, transformed by distributed generation and storage, "used to be 10 years away, now it's five, maybe even less," Hannegan said, "In some places it's actually even here today."

But much of the old dumb grid—in which electricity flowed in one direction from centralized power plants to largely passive consumers—is not nimble enough to accommodate the change.

"You now see this new two-way flow of both information and electrons between the consumer and the producer, along a distribution and transmission system that has to be a lot more agile and flexible," he said. "Flexibility is probably the single most important aspect of a modern energy grid that we don't have today."

More solar and wind means less reliance on other energy sources, but also more variable use of those sources. Some were not designed for variable use: nuclear reactors are either on or off, old coal plants are slow and expensive to start, gas peaker plants start quickly, but run inefficiently.

Demand also becomes more variable as customers generate electricity at home, Hannegan said, and the two-way flow of electricity is straining transmission and distribution systems. The new grid needs flexibility, he said, to absorb this variability.

Batteries help.

"Whether it's energy storage or power electronics or responsive demands, there are a number of ways to get at this flexibility."

Flexibility could also be achieved, Hannegan added, with flexible gas turbines or with small modular reactors that can respond to market signals, producing electricity when it's needed and hydrogen when it's not.

His Energy Systems Integration Facility, a part of the National Renewable Energy Laboratory, simulates the grid with "a megawatt-scale distribution system in a box." Built with funding from President Obama's 2009 stimulus package, the laboratory integrates a model of the traditional grid with emerging and emergent technologies including solar, wind, batteries, thermal storage, smart homes, electric vehicles, hydrogen and fuel cells, micro grids, and other innovations.

"All of these are connected by a distribution system allowing us to plug and play different combinations of devices and then power them and run them with models and simulations of real markets, real environmental data, real wind and solar production," Hannegan said.

"You can actually think of this as a design studio, if you will, for a future distribution system that will serve your needs."

The falling costs and rising market penetrations of emergent energy technologies, according to the U.S. Department of Energy.